Letter of Explanation for Mortgage

Why are required to write an explanation in many scenarios? However, most of the situations are those when we want to clear our position. The explanation letter is a short and brief letter that explains something to the recipient. Most commonly, these letters are written in the business world when people feel the need to explain something.

It is very intimidating when you are asked to write the explanation letter in response to the mortgage application. You must be dreaming of a beautiful house of your own and suddenly, the fear of getting your application surrounds you, and start panicking. However, there is nothing to be worried about especially when you know how to draft the explanation letter.

What is a letter of explanation for a mortgage?

This is a special kind of explanation letter which is usually written upon the request of the lender of the mortgage. In simple words, this letter is always written in response to some letter in which the mortgage lender has asked the person applying for a mortgage to provide specific information that was missing in the application letter or form.

Why it is important to write a description letter to a mortgage lender?

In many cases, this letter becomes a very crucial part of the application process. Many people fail to complete the application process for a mortgage because they don’t provide the necessary information needed by the mortgage lender. Therefore, they should write an explanation letter to prevent their application from getting rejected. Since the clarification is usually given in the response, the person who has been asked to clarify should write it as soon as possible. This will show that he is serious about getting a loan.

When to write the letter of explanation for the mortgage?

People are required to write the description letter in the following scenarios:

  1. When they have left their job and they have a gap in their credit report.
  2. When they have a declining income.
  3. When they have high debt to repay as compared to their income.
  4. There is the opening of a new account on your credit report.
  5. When there is the name of another person on your credit report that you have not mentioned in the application form.

There can be hundreds of other scenarios in which you will be asked to write the description letter that explains your point in a better way. No matter in which scenario you are writing, always make sure that you provide all the details that the recipient has asked you to provide when you want your mortgage application to be accepted.

Writing tips:

  1. Make sure that you always add your legal name in this letter with no spelling mistake.
  2. Your letter of explanation should only answer the question that you have been asked. There is no need to add extra details that have nothing to do with the explanation as no one likes to read long letters.
  3. Keep your letter clear from all the ambiguities. When you are explaining something, make sure what you said about the same thing in the application letter. If your statements did not match, your credibility would become questionable for the recipient.

Sample explanation letter for a mortgage:


Name of the institution

Subject: an explanation for mortgage

To whom it may concern.

I am writing this letter to explain a few details that I did not mention in the application letter for a mortgage. My current net income is 8000$, however, my credit report shows that there has been a decline in my income last year.

I want to clear that income was on the wane due to Covid-19. The unprecedented circumstances have damaged my finances badly. However, I managed to stand on my feet again and within one year, my net income rose to 8000$. I am expected to earn more when the natural life activities restore once the vaccination process is over.

I hope that I have cleared my position well and answered your query to satisfy you. If you have any query regarding the information provided in the letter or if you think there is still something missing in my application letter, please let me know.


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